N Korea raises price of nuclear inspections: Pyongyang, sensing caution by US, wants to be 'rewarded' with diplomatic recognition and economic aid

NORTH KOREA is raising the stakes in its game of nuclear blackmail with the United States amid signs that Washington is unwilling to force a showdown with the maverick Communist state. Apparently sensing a lack of resolve in the US administration, Pyongyang is pressing for maximum economic and diplomatic concessions from the US while it resists thorough inspections of its atomic plants.

Last night a senior US official said Washington was near to a deal on inspections of North Korea's nuclear programme that could be wrapped up this week. But there were indications the agreement could be less than Washington and the international community had sought, and no time was set.

South Korea's President, Kim Young Sam, yesterday reiterated his determination to find a way out of the nuclear impasse, which has frozen inter-Korean peace negotiations. 'North Korea's nuclear issue, which is directly related to our nation's survival, must be resolved within this year without fail,' President Kim was quoted as saying. South Korea, whose capital, Seoul, is 25 miles from the North Korean border and its 1.1-million-strong army, has been reluctant to back its fanatical neighbour into a corner over the nuclear issue.

In a defiant new year message, Kim Il Sung, the North Korean leader, warned of 'catastrophe' if the US made threats to his country's nuclear programme, while his Foreign Ministry explicitly rejected the kind of nuclear inspections that are required of all signatories of the nuclear Non-Proliferation Treaty (NPT). 'Pressure or threats will have no effect on us . . . The US must see all the facts squarely and behave with prudence,' said the 81- year-old leader of the Stalinist state.

Last week the US State Department said continuing talks in New York between the two sides had 'moved closer' to an agreement on monitoring North Korea's nuclear facilities, which many fear are developing atomic bombs. But North Korea appears ready to allow only superficial inspections, which would not reveal new information.

Until recently, the International Atomic Energy Agency (IAEA) had been running cameras at several locations in North Korean nuclear facilities to monitor day-to-day activities there. The North had allowed this, but last month refused the agency access to the cameras to replace film.

With a deft dipiomatic side-shuffle, Pyongyang is now holding out an offer to the IAEA to replace the camera films as a big concession in its talks with the US - even though a year ago these cameras were accepted without argument. In exchange for this 'concession', Pyongyang wants the US to cancel the annual Team Spirit joint military exercises it conducts with South Korea. Only then would it enter into further negotiations over nuclear inspections, each stage of which is likely to come with a hefty price-tag: diplomatic recognition of Pyongyang by Washington and Tokyo and economic aid.

The US seems reluctant to force the issue by recommending to the UN Security Council that sanctions be placed on North Korea for its non-compliance with the NPT. Pyongyang has hinted that imposition of sanctions would be grounds for renewed war with South Korea.

However, beneath the bellicose statements issuing from North Korea are also increasingly clear calls for economic help. This is a remarkable turnaround in policy for a country which still regularly refers to the 'neo-colonialist policies of the US and its lackeys'. President Kim has emphasised the need to move away from a heavy-industry programme: 'We must in this period implement to the letter the agriculture-first, light industry-first and foreign trade-first policy.'